HUYA Inc. Reports Third Quarter 2021 Unaudited Financial Results
HUYA Inc. (“Huya” or the “Company”) (NYSE: HUYA), a leading game live streaming platform in China, today announced its unaudited financial results for the third quarter ended September 30, 2021.
Third Quarter 2021 Highlights
- Total net revenues for the third quarter of 2021 increased by 5.7% to RMB2,975.5 million (US$461.8 million), from RMB2,814.8 million for the same period of 2020.
- Net income attributable to HUYA Inc. was RMB524.4 million (US$81.4 million) for the third quarter of 2021, compared with RMB253.0 million for the same period of 2020.
- Non-GAAP net income attributable to HUYA Inc.[1]was RMB180.0 million (US$27.9 million) for the third quarter of 2021, compared with RMB361.2 million for the same period of 2020.
- Average mobile MAUs[2] of Huya Live in the third quarter of 2021 increased by 14.7% to 85.1 million, from 74.2 million in the same period of 2020.
- Total number of paying users[3]of Huya Live in the third quarter of 2021 reached 6.0 million, compared with 6.0 million in the same period of 2020.
“During the recent summer period, we saw robust growth in mobile users based on our comprehensive content offerings, strong operational capabilities and continued promotion efforts. Huya Live’s average mobile MAUs reached 85.1 million in the third quarter of 2021, representing a year-over-year increase of 14.7% and a quarter-over-quarter increase of 9.7%,” said Mr. Rongjie Dong, Chief Executive Officer of Huya. “In light of the dynamic business environment, reinforcing our competitive advantages is pivotal to our continuing success. In this spirit, we will strive to promote new game launches, further enrich our content library, and advance product and service upgrades through innovation to meet diverse user demands as we continue to ensure a great user experience.”
Ms. Ashley Xin Wu, Vice President of Finance of Huya, commented, “We continued our sustained growth pathway in the third quarter by achieving 5.7% year-over-year top-line growth. And, against the backdrop of an evolving landscape, we strengthened our investment in quality content and content creators to cement our leading market position. Going forward, we will remain dedicated to driving user growth, improving monetization and enhancing our ecosystem.”
Third Quarter 2021 Financial Results
Total net revenues for the third quarter of 2021 increased by 5.7% to RMB2,975.5 million (US$461.8 million), from RMB2,814.8 million for the same period of 2020.
Live streaming revenues decreased by 2.1% to RMB2,601.9 million (US$403.8 million) for the third quarter of 2021, from RMB2,657.2 million for the same period of 2020, primarily due to lower average spending per paying user on Huya Live.
Advertising and other revenues increased by 137.1% to RMB373.7 million (US$58.0 million) for the third quarter of 2021, from RMB157.6 million for the same period of 2020, primarily driven by the revenues from licensing of content.
Cost of revenues increased by 12.6% to RMB2,471.5 million (US$383.6 million) for the third quarter of 2021 from RMB2,194.3 million for the same period of 2020, primarily due to the increase in revenue sharing fees and content costs.
Revenue sharing fees and content costs increased by 16.3% to RMB2,123.6 million (US$329.6 million) for the third quarter of 2021 from RMB1,826.7 million for the same period of 2020, primarily due to the increase in revenue sharing fees in relation to certain broadcaster incentive programs, and the increase in spending on e-sports content and content creators.
Bandwidth costs decreased by 14.2% to RMB178.0 million (US$27.6 million) for the third quarter of 2021 from RMB207.6 million for the same period of 2020, primarily due to improved bandwidth cost management and continued technology enhancement efforts.
Gross profit decreased by 18.8% to RMB504.0 million (US$78.2 million) for the third quarter of 2021 from RMB620.6 million for the same period of 2020, primarily due to the increased cost of revenues driven by higher revenue sharing fees and content costs. Gross margin was 16.9 % for the third quarter of 2021, compared with 22.0% for the same period of 2020.
Research and development expenses increased by 12.9% to RMB206.2 million (US$32.0 million) for the third quarter of 2021 from RMB182.7 million for the same period of 2020, primarily due to increased personnel-related expenses.
Sales and marketing expenses increased by 59.5% to RMB229.4 million (US$35.6 million) for the third quarter of 2021 from RMB143.8 million for the same period of 2020, primarily due to increased marketing expenses to promote the Company’s content, products, services and brand name, particularly including promotional activities for e-sports events and cooperation with various marketing channels during the summer vacations.
General and administrative expenses decreased by 32.6% to RMB80.1 million (US$12.4 million) for the third quarter of 2021 from RMB118.7 million for the same period of 2020, primarily due to lower share-based compensation expenses.
Operating income decreased by 62.7% to RMB83.1 million (US$12.9 million) for the third quarter of 2021 from RMB222.9 million for the same period of 2020. Operating margin was 2.8% for the third quarter of 2021, compared with 7.9% for the same period of 2020.
Interest and short-term investments income were RMB62.6 million (US$9.7 million) for the third quarter of 2021, compared with RMB75.9 million for the same period of 2020, primarily due to decreased interest rates.
Income tax expenses decreased by 19.9% to RMB40.6 million (US$6.3 million) for the third quarter of 2021 from RMB50.7 million for the same period of 2020.
Share of income in equity method investments, net of income taxes was RMB378.7 million (US$58.8 million) for the third quarter of 2021, compared with RMB0.2 million for the same period of 2020, primarily due to the investment income related to a disposal of equity investment.
Net income attributable to HUYA Inc. for the third quarter of 2021 was RMB524.4 million (US$81.4 million), compared with RMB253.0 million for the same period of 2020.
Non-GAAP net income attributable to HUYA Inc. for the third quarter of 2021, which excludes share-based compensation expenses, and gain on fair value change and disposal of equity investments, net of income taxes, was RMB180.0 million (US$27.9 million), compared with RMB361.2 million for the same period of 2020.
Diluted net income per American depositary share (“ADS”) was RMB2.17 (US$0.34) for the third quarter of 2021, compared with RMB1.05 for the same period of 2020. Each ADS represents one Class A ordinary share of the Company.
Non-GAAP diluted net income per ADS was RMB0.75 (US$0.12) for the third quarter of 2021, compared with RMB1.50 for the same period of 2020.
As of September 30, 2021, the Company had cash and cash equivalents, short-term deposits and short-term investments of RMB11,119.6 million (US$1,725.7 million), compared with RMB10,738.2 million as of June 30, 2021, primarily due to a cash inflow from a disposal of equity investment.
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